What a Brexit could mean for expats

The upcoming EU referendum is a major topic of debate in the UK, and there are varying opinions on both the positive and negative consequences if a Brexit was to happen. For the millions of Briton’s who live permanently elsewhere in Europe or own a holiday home, the prospect of a British exit has become a huge cause for concern.

What do expats currently think?

At present, expats will be able to vote in the referendum so long as they haven’t lived abroad for over 15 years, meaning about a fifth are ineligible to vote. However, Britons who have lived abroad for over 15 years have launched High Court action that could delay the referendum. Represented by law firm Leigh Day, expats are arguing that the EU Referendum Act breaches their rights under European law, and the people that it excludes are UK citizens who are among those most likely to be affected by the decision taken by voters in the referendum. If successful, the referendum that is currently scheduled for the 23rd June could be delayed while up to 2 million extra names are added to the register of voters.

According to a recent survey by overseas property media brand A Place in the Sun, 90 per cent of UK overseas property owners are unsure of how a Brexit would affect them. Although four in ten expats admitted they were concerned about the situation, seven in ten reported that leaving the EU would not prevent or postpone them from buying an overseas property in Europe. Despite the uncertainty, people who are planning to move abroad don’t want to let the prospect of a Brexit get in the way of their plans.

So what would expat life be like for Brits abroad following a Brexit?

Could expats be deported by EU members?

Expats living in the EU currently enjoy a range of specific rights to live and work, as well as access to pensions, healthcare, and public benefits which are only guaranteed because of EU law. If a Brexit happens, there will be no requirement under EU law for these rights to be maintained. If the government come to an agreement with the EU to maintain these rights, the expectation must be that this would have to be reciprocated for EU citizens in the UK.

It has been suggested by pro-EU advocates that the reason why so many British expats decide to stay in Europe is because of the European Union’s right of free movement. This means there is no risk of them being expelled from their new country of residence, as EU members cannot bar citizens of other EU states. Former attorney general Dominic Grieve QC has recently argued that a Brexit would see expats who live in EU countries “becoming illegal immigrants overnight” if Britain did not maintain some form of free movement after leaving the EU.

However, there are numerous reasons to suggest that it is extremely unlikely that EU members would deport expats if a Brexit was to happen. It is important to consider EU members’ treatment of their own nationals who live in the UK. If mass numbers of citizens were expelled from their countries, it could startle foreign investors and potentially cause a turmoil in the economy of the expelling country.

Many lawyers have argued that expats could utilise significant legal protections that would apply after a Brexit. According to the Vienna Convention on the Law of Treaties 1969, expats have now “acquired rights” in their home countries, which they should hold on to in the case of a Brexit. Generally speaking, expats should retain their free movement rights within Europe and will retain all their rights following a withdrawal. In other words, so long as Britons started their expat life in the EU before Brexit, this means they have already exercised their right to live in EU states, and would keep that right if Britain did in fact leave the EU. After the Brexit, British people’s ability to live and work in EU nations would depend on new agreements the UK negotiated with those nations.

Taxes and Mortgages

The current tax situation for expats would most likely remain the same as there are current bilateral agreements in place between the UK and other European countries that do not have anything to do with EU rules. Local taxes should also stay the same, as they tend to be based on how long the property owner stays at the property, rather than if they come from an EU member state or not.

When it comes to mortgages, British people will have a less appealing profile so are likely to be charged higher interest rates and have to pay a bigger deposit. Despite this, because British buyers are such a huge part of overseas property markets, particularly in Spain, France, and Portugal, banks are unlikely to hinder the process due to Britain’s global financial profile.

EU Healthcare and Benefits

Healthcare is currently free throughout Europe to any UK citizen that has a European health insurance card, and to UK state pensioners living in the European Economic Area. If a Brexit does happen, these rights could be taken away and expats may have to fund for private healthcare. However, it is important to consider that if expats were barred from EU healthcare and benefits, it is likely that the UK would take retaliatory measures on the 3 million EU nationals who live in Britain. Therefore, the UK should be able to come to some sort of agreement regarding EU healthcare.

It is possible that an exit agreement could include “reciprocal healthcare”. A precedent for such an agreement is that non-EU countries such as Iceland, Liechtenstein and Norway can belong to the European health insurance card scheme even though they are not members because they are part of the single market of the EEA. A similar agreement could be made between the EU and the UK after Brexit.

Pensions

If Brexit does happen, it is possible that expats who have British state pensions may find that their pensions are frozen. If there is no “EU pension” arrangement, then a Briton’s pension for a period worked in the EU could be worth less when it is claimed. Because the Pound is likely drop in value after Brexit, the purchasing power on expats’ pensions will also fall.

Visas

If the referendum does result in Britain leaving the EU, British people may now find that they have to apply for a visa to live, work, or retire in other European countries. For expats who already reside elsewhere in the EU, it is likely that there will be a transitionary period in which they have a certain amount of time to apply for a visa to continue living in that country.

To summarise, a vote to leave the EU would be the start of a long process. The outcome is unpredictable, and the UK would have to come to a series of agreements with the EU to ensure all expats’ rights are maintained.

Are you thinking of buying or renting abroad?

Do you receive a monthly pension or other regular payment from your home country? Are you thinking of investing overseas?

Then take advantage of HiFX Foreign Currency Exchange services and get a better rate of exchange and lower commissions.Article reproduced with kind permission of HiFX.

5 comments on “What a Brexit could mean for expats”

It won’t be immigration that is the problem in the UK, but rather repatriation as all the Pensioners who cannot survive on their frozen pensions and lack of health care return to the UK in their droves claiming all the benefits that they have been denied over the years

Quite, Janet! + There shouldn’t be a 15 year limit on things. You’re either British or you’re not. I don’t see how it has to do with where you live especially as the expats are those who may loose most.

As Brexit would effect ex pats more than anyone else ,why are we not allowed to vote even if we have been out of UK for more than 15 years.It is our human right to be able to decide our futures.,and everyone’s perogative to be able to live a life of choosing without outside interference.As most of us have chosen our future ,by living a decent and self helped life why should we notpbe able to continue ,therefore allowing a vote by all ex pats to continue .I hope they overturn the date.